The stock market has responded positively to the appointment of Liu Shiyu as the new head of China Security Regulatory Commission (CSRC), but the former veteran banker still faces an uphill battle bolstering investor confidence, an official at the regulator says.

Liu Shiyu

The market rose by more than 2 percent from a day earlier to 2,918 points on February 22 two days after Liu, the former chairman of Agricultural Bank of China, took over at the CSRC, replacing Xiao Gang.

Xiao, who held the post for three years, was removed on February 20, Xinhua said. The move followed major bourse turmoil last year that saw the main stock market index lose about 60 percent of its value from a seven-year high in June, wiping nearly 30 trillion yuan from the two main exchanges.

Xiao has also been under fire for his efforts to rescue the market, including by introducing a short-lived “circuit breaker” mechanism.

Liu, 54, follows a path that four predecessors at the CSRC took, moving from the central bank to a commercial bank and then to the securities regulator. He worked at the central bank for 18 years starting in 1996, rising through the ranks before a promotion to deputy governor in June 2006.

He became the head of Agricultural Bank, one of the country’s Big Four state-run banks, in October 2014.

Liu will face a test in restoring investor confidence shaken by allegations of insider trading and botched government intervention, said a CSRC official who asked not to be named. The official warned that there are no quick fixes to the problems besetting the stock market, and Liu must push for structural reform in order to nurture long-term viability. Read more